SunTrust halts reverse mortgage lending

SunTrust Bank(STI) halted its reverse mortgage lending business, effective Thursday.
The bank will continue processing reverse mortgages already in the pipeline, but will not accept new applications.
The lender's decision arrives after a few months after Wells Fargo(WFC) and Bank of America(BAC) announced plans to exit reverse mortgages because of unpredictable home values and restrictions on those loans.
"After careful consideration, we have determined that we will no longer offer reverse mortgages," said SunTrust, which is the eighth-largest mortgage originator in the nation.
"Production volume for these types of loans is extremely small compared to our overall mortgage volume, and from a strategic perspective focusing our full resources on more traditional mortgage origination and servicing is the most effective and efficient use of our resources," the bank said.
SunTrust expects the move to "impact employees tied to the reverse mortgage lending business," but officials did not elaborate.
"We are working with impacted employees to help them in identifying and pursuing other possible opportunities within the company and providing outplacement support," SunTrust said.
Write to:Kerri Panchuk

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Kerri Ann Panchuk was the Online Editor of HousingWire.com, and regular contributor to HousingWire magazine. Kerri joined HousingWire as a Reporter in early 2011 and since earned a law degree from Southern Methodist University. She previously worked at the Dallas Business Journal.